Regulators Cut Funding for Efficiency Programs in Nevada

Julia Pyper is a Senior Editor at Greentech Media covering clean energy policy, the solar industry, grid edge technologies and electric mobility. She previously reported for E&E Publishing, and has covered clean energy and climate change issues across the U.S. and abroad, including in Haiti, Israel and the Maldives. Julia holds degrees from McGill and Columbia Universities. Find her on Twitter @JMPyper.

On December 22, the Public Utilities Commission of Nevada approved funding cuts for several popular energy-efficiency programs in southern Nevada -- a move that was largely overshadowed by controversial changes to the state’s net metering policy.

Four programs were eliminated at the December hearing: a residential lighting program that reduces the cost of LED lights, a refrigerator recycling program, a solar thermal water heating program and program that provides incentives for highly efficient pool pumps.

Earlier this month, as public outcry mounted against the new solar rates, NV Energy filed to reinstate funding for two of the efficiency programs, Energy Central reports.

“Granting reconsideration and authorizing continuation of the Pool Pumps and Residential Lighting programs will provide customers with more options and choices that will provide benefits to all customers,” the utility stated in its request.

“In eliminating the residential lighting and pool pumps programs, the PUC went further than anyone recommended. NV Energy proposed increasing the budget for these popular and cost-effective programs, and neither the Bureau of Consumer Protection nor PUC staff proposed eliminating them,” he wrote in an email. “The PUC went off on its own, without any justification in the docket record, in eliminating the programs.”

By eliminating those two programs alone, the PUC is depriving consumers of about $25 million in net economic benefits, Geller said. At the same time, by eliminating the energy savings those programs would achieve, NV Energy will need to invest in more costly power plants and power purchases, which will increase all electricity bills in the long run.

However, Nevada’s commissioners argue the cuts are needed to keep costs down as major casino customers look to abandon the utility, creating uncertainty around the utility’s future load forecast. The commissioners also stated that the efficiency programs, some of them decades old, should not be able to continue in perpetuity “with ever-increasing budgets.”

In addition to the program cuts, the commission lowered spending for other efficiency programs, such as residential demand response. NV Energy’s Commercial Services program, which helps businesses adopt LED lights and upgrade mechanical equipment, saw funding drop nearly 20 percent from a proposed $13.5 million per year over the next three years, to $11 million per year.

NV Energy initially requested a total energy efficiency budget of $56 million in 2016, up $5 million over its current budget. The PUC ultimately approved a $41 million limit on efficiency spending.

As a share of revenue, NV Energy’s budget for energy efficiency programs is now half that of Rocky Mountain Power in neighboring Utah and 60 percent of what utilities are spending in Arizona, said Gellner. The PUC ruling is “penny-wise and pound-foolish, and not in the public interest,” he said.

Reply comments to NV Energy’s reconsideration request are due this week. The PUC is expected to hold a hearing on the issue in February.

* This story was updated with figures comparing NV Energy's efficiency spending to that of neighboring utilities. The difference is greater than first reported.